When my daughter came home from school and told me she had been arguing with two children over how they receive pocket money I was shocked…

In the previous 90 days my daughter had saved over £100 of EARNINGS, bought herself a Ninetendo WII and learnt about setting goals and overcoming setbacks. She was proud of her achievement and rightly so.

But let’s go back to the start…

All kids need motivating and it’s our job as a parent to inspire that in them. As a practical parent I’m tuned in to what my children are looking for next. And when I noticed my daughter wanting more money I latched onto it.

We spoke about why she wanted money. We spoke about money values – saving, investing, spending and most importantly, earning.

Of course I deliberately dwelt on the “earning”, because this is the key for teaching children about money.

If we give kids handouts for doing nothing, they learn to take handouts and we teach them to “Get something for nothing” and this is just not teaching them how to be successful in the real world.

There are many stories of self-made millionaires who had a strong work ethic from very young. They instinctively learn how to make and manage money and are years ahead of the kids who wait until 16-22 years old before they enter the world of making money.

At 10 my daughter noticed her fellow students fancied her cake at lunchtime. So bought the whole cake for £1 and then sold it for £1 a slice, so she made £10 out of £1.

But that was before we sat down to talk about how she could make more money…

She asked me, “Dad what can I do at home to get more money?”

“What do you want more money for?” I asked.

“A WII,” she replied.

This was cool. She knew what she wanted and she was prepared to work for it.

She offered to cook. I said, “No I like cooking. I wouldn’t be prepared to pay you for doing something I love doing.”

“What about gardening?”

“I like that too?”

“Okay what don’t you like doing?”

I didn’t need to think about that. “Cleaning the house. Cleaning the car. Ironing…”

“Okay. I’ll clean the house.”

Done. We agreed on the amount. I then helped her set a goal – how much she needed to earn each week, to get her WII in 90 days. It was then that she realized that she needed to earn some extra money.

But that wasn’t a problem.

She got on the phone to her gran-parents and started to discuss what they didn’t like doing and would be prepared to pay her to do.

There are some huge benefits in having your kids earn their pocket money over giving them weekly handouts for doing nothing and that that’s where the argument with friends at the school comes in…

Her friends think it’s terrible that she works for her pocket money…

But she doesn’t…

You see my daughter knows that over the next year, through working for her pocket money she will be 6 times richer than her friends in money terms by the end of this year.

But there is something more important than money at work here – think appreciation, life values and morals…

While her friends spend all their money on sweets, my daughter knows how many hours she works to make her money, so she isn’t prepared to let it all slip through her fingers on things that give her no lasting pleasure.

She is already wise to the difference in how people spend and invest their money… while she invests £1 in one cake, her friends spend £10 to get theirs.

With my help she is investing 50% of the money she is making and letting it grow with compound interest, so while she is learning at school, having all her needs taken care of by parents, 50% what she earns is growing day-by-day.

From my point of view I’m not just teaching her about money, I’m leveraging my own…

When I pay her for doing a job, and she earns the money, which I may have paid a cleaner to do, the money stays in our family. I now don’t pay the cleaner, but pay my daughter. Because I pay my daughter, she doesn’t come to me for all the things she wants, but doesn’t have the money for. When she wants something she saves and she buys.

Be Sociable, Share!

•